F2F #81: Your competitor is Microsoft Office

The first time I interviewed Amir Salihefendic (CEO @ Doist) at one of our events, he said something that stunned me and still amazes me, to this day: the clarity with which he said that they have endured 20 years of fierce competition, outliving amazing products like Wunderlist, Any.do and many more and how, ultimately, they found that their real competitor is Microsoft Office.

Put simply, any SaaS tool competes against similar tools - be they all-in-one generalist tools or super-niche specialist tools - but also against tools that solve the pain without being designed for that use case. That's where Microsoft Office - or any office suite per se - comes in.

Virtually any semi-complex SaaS tool can be built on top of Excel / Access - or their equivalents in the Apple ecosystem -. I'm talking about a CRM, a kanban board, an editorial calendar, a hiring funnel or a calendar, just to name a few.

And that's true. If you compare Total Addressable Markets (TAM), the Excel TAM is almost certainly bigger, and by a lot.

A to-do list app, like Todoist competes for a slice of the productivity market among people who want a to-do list app. That's already a filtered audience.

Excel's TAM is "anyone who has ever needed to organise information", which is basically every knowledge worker on the planet. Microsoft claims 750M+ Excel users. No single SaaS tool comes close. And while this comparison might appear a little far-fetched to you, you'd have to see the bullshit I get in the investment decks I receive.

But here's the more interesting opportunity of all: the Excel TAM is also the untapped TAM for every vertical SaaS tool. Every person using a spreadsheet as a CRM is a potential Hubspot customer who never converted. Every hiring manager tracking candidates in Excel is a potential Greenhouse user who didn't.

For instance, at MarsBased, we don't use a CRM. We have, in the past, used Trello, Hubspot and Pipedrive, but I eventually crawled back to Google Sheets because it suited me better. And here's my hot take: if I were less technical, I'd buy a CRM and pay the 49€/mo for convenience. After all, almost every SaaS we use is just a better-looking UI for Excel.

So the real argument becomes: the biggest market opportunity isn't building the next to-do app: it's converting Excel users who've already proven they have the problem, just without a real solution.

The to-do app user is already aware, already converted, and probably already paying someone else. They're probably entrenched in the app and are aware of switching costs because they've changed 2-3x on average. You're fighting churn, on top of the switching costs. You're competing against swaths of marketers from these companies who target their competitors' users in a zero-sum game where the only winner is the ads platform.

The Excel user, on the other hand, has already done the hard work for you: they identified the problem, built a workaround, and proved they'll invest time in solving it. They just never found (or didn't know they needed) a better tool. Lower awareness barrier, no competitor lock-in, and a much larger pool.

The caveat: converting Excel users requires more education and patience. They don't know they have a "CRM problem". They think they have a messy spreadsheet and they're happy with it - unless it breaks. So your marketing has to meet them at the symptom, not the category. Acquiring an Excel user is cheaper because you're not fighting incumbents for a pre-converted audience, so the CAC is lower than a converted target customer you want to steal from your competitor.

Also, that's a content/SEO game, not a paid acquisition game, which makes it cheaper at scale but lazy people will go for the pay-to-win strategy.

Fair play to them, but I think it's much more interesting solving the other problem: how to convert the Excel people into paying customers.